Many job applicants are familiar with undergoing a drug screening before being accepted for a job, knowing that any signs of illegal drug use could result in losing the opportunity. However, some would be shocked if they were passed over for testing positive to a legal substance, such as nicotine. At many companies, however, refusing to hire smokers is becoming more common because of corporate wellness programs aimed to promote health and keep insurance costs low. Of the 50 states, 21 allow companies to refuse to hire someone on the basis of whether they are a smoker. Generally, Americans disapprove of this practice: only 14% said that companies should be able to refuse to hire someone based on tobacco use (Gallup, 7/22/2014).
The trend of passing over smokers comes with companies' increased efforts to keep insurance expenses low by promoting health and discouraging or eliminating habits that add to the cost. Some 98% of large companies and 73% of smaller ones offer some sort of corporate wellness program (Kaiser Family Foundation, 9/10/2014). These initiatives must be voluntary under the Americans with Disabilities Act (ADA). However, programs with harsh penalties have led to criticism that many are "voluntary" in name only and are masquerading as beneficial to employees when they really shift insurance costs from the employer back to workers. These programs also delve significantly into the realm of the personal, including habits around smoking and alcohol, details around height and weight, as well as medical preferences such as receiving flu vaccines and family planning decisions.
Most employee wellness programs use a combination of both incentives and penalties to encourage participation. For instance, workers could gain financial discounts for lowering blood pressure or cholesterol, or for completing health-risk assessments. Safeway, whose wellness program was applauded by President Obama and is generally held up as an example of an effective program, lowered annual premiums significantly for individuals and families that passed four measures of health: tobacco use, weight, blood pressure, and cholesterol levels. However, these programs also commonly penalize poor performance or lack of progress by charging higher health insurance premiums to those who smoke or who have a high body mass index. Workers can also be penalized for refusing to participate. For example, CVS required all employees to submit to a medical exam or pay a $600 fine. The Affordable Care Act has encouraged wellness programs by raising the legal limit of penalties that employers can charge for health-contingent wellness program to 30% of total premium costs; for tobacco users, businesses can charge up to 50% more (The New York Times, 9/11/2014).
The penalties imposed on those who do not participate or who do not meet wellness program requirements has elicited the question of whether these programs are truly "voluntary" and whether they comply with federal law. In 2014, the Equal Employment Opportunity Commission (EEOC) sued several companies, claiming that their wellness programs were not voluntary and that these programs did not comply with the ADA. One such program was that of Honeywell, which implemented a plan where employees could face up to $4,000 in financial penalties for not participating or not meeting requirements, such as smoking cessation (PBS 12/2/2014). The EEOC claimed that such penalties induce employees to undergo medical examinations that are non-job related and therefore violate the ADA, which limits the circumstances that an employer can require physical examination or answers to medical inquiries. The EEOC asserts that such harsh financial penalties rendered the programs involuntary and in violation of the ADA.
The EEOC recently released a proposal that includes guidelines to clarify the interpretation of wellness programs under the ADA and how the definition of "voluntary" applies to these programs. However these rules are not finalized and a bill proposed in Congress could limit the EEOC's ability to enforce restrictions on corporate wellness programs.
Depending on the outcome of the bill and the final rules decided upon by the EEOC, the penalizations in wellness programs may be restricted, but not eliminated altogether as the Affordable Care Act would still provide that employers can charge 30-50% more for premiums based on health-contingent wellness programs.
Readers, do you think corporate wellness programs are truly voluntary? Comment and let us know!